New York Times - 25 Aug 93

Who Foots the Bill For Recycling?

By JOHN HOLUSHA
Published: Sunday, April 25, 1993

EACH week, millions of people nationwide carefully
sort their trash, putting, say, cans in one container, bottles in
another, newspapers in a third. Most people feel good about recycling,
convinced that they are helping the planet, and their communities, by
conserving resources and saving landfill space.

What they're also doing, though, is taking money away
from health care and other basic services. As experts in municipal
government and garbage disposal point out, the market value of those
cans, bottles and newspapers does not come close to meeting the costs of
collecting and processing them.

"Recycling is a good thing, but it costs money," said
David Gatton, the senior environmental adviser to the United States
Conference of Mayors. "Money that could go for schools is being absorbed
by increasing disposal costs."

"We are moving into the second phase of recycling,"
he said, "which is deciding who pays." Will it be manufacturers, local
governments or consumers? In the answer to that question lies the future
of recycling.

As things stand now, those who do not pay include
packaging manufacturers, consumer products companies and publishers.
They produce whatever they can sell, free of disposal costs, because
taxpayers have always picked up the tab for disposal.

But that could change. Max Baucus, the Montana
Democrat who heads the Senate Environment and Public Works Committee,
told the Conference of Mayors recently that he would press for
legislation that would make someone other than the taxpayer -- whether
it be the maker of the package, the maker of the product itself, the
supplier of the raw material used in the packaging, or even consumers
themselves -- absorb some or all of the cost of disposal. Manufacturers
should take "responsibility for the life cycle of a product," he said.
"Anyone who sells a product should also be responsible for the product
when it becomes waste."

Such legislation might require manufacturers to
include the cost of disposal in a product's price, or it might levy a
tax on manufacturers to pay for recycling. Thisapproach resembles one
being tried in Germany, where a 1991 law requires businesses to collect
and recycle packaging used for their products. Faced with that law, many
companies are rethinking, and shrinking, their packaging.

Senator Baucus's bill, expected to be introduced this
summer, is not likely to be considered before next year. (Legislation
amending the Superfund dump-cleanup law is considered the leading
environmental priority this year.) And manufacturers will probably mount
a powerful fight against any such bill. (Last year they helped defeat an
initiative on the Massachusetts ballot that would have mandated minimum
levels of recycled content in various products.)

In the meantime, even as last week's Earth Day
observances continue, there is scattered rebellion against recycling's
high costs. Last year, Philadelphia stopped collecting plastic as part
of its curbside recycling program in order to trim $400,000 from its
waste disposal budget. This year, according to a survey by Waste Age
magazine, rising health-care costs cut into recycling budgets in several
states.

FIVE years after recycling took hold in this country,
it has become clear that the market value of the materials left at the
curbside is not likely to cover the collection and processing costs for
a long time.

Recycling adds costs by forcing trash haulers to add
specialized trucks and extra crews to handle materials separately. And
municipalities, or the private companies they contract with, have to
build and staff facilities to separate recyclables from one another, and
from common trash.

A study conducted for the National Solid Wastes
Management Association, a trade group of private trash haulers, found
the cost of processing in a recovery plant the range of materials left
at curbside is $50 a ton, while the market value is $30. In a separate
study, Waste Management Inc., the nation's largest trash hauler, added
in the costs of collection, and put the total average cost at about $175
a ton and the average value of recovered materials at $40. For some
materials, like plastics, costs are far higher.

Because recycling has been so costly, many in the
environmental community argue that manufacturers should include the cost
of disposal in a product's price, so they will have an incentive to
minimize costs. A producer of peanut butter in glass jars, for example,
might reconsider a switch to plastic if the increased disposal cost
would mean a big rise in the peanut butter price.

"We don't know what the cost of recycling is, but we
do know that the nation spent $30 billion on waste disposal last year
and that the cost is expected to rise to $45 billion by 1995," with
recycling an important contributor to that rise, said Allen Hershkowitz,
a solid waste specialist at the Natural Resources Defense Council, based
in New York.

Mr. Hershkowitz said manufacturers should be made
responsible for the cost of disposal. He said it was absurd for cities
and towns to get into the business of trying to collect and broker
commodities like aluminum, plastic and paper.

With the right incentives, he noted, private industry
will leap in. For example, after several states passed "bottle bill"
laws mandating deposits on beverage and other containers, Wellman Inc.,
a private company, capitalized on that assured supply and developed a
thriving business recycling plastic soda bottles into fiber fill for
clothing and tufting for carpet.

Predictably, producers of consumer products and
packages like the system as it exists now. "If I buy a product, I'm the
polluter," said Ron Perkins, an official of the American Plastics
Council. "I should be responsible for the disposal of the package."

Plastics, it turns out, are the biggest single
headache for recyclers. The very properties that make them valuable in
packaging -- light weight and high strength -- make them difficult to
recycle. Plastic bottles, jugs and jars are like rigid balloons that
quickly fill up collection trucks without accumulating much weight. The
Waste Management study found that plastic accounted for 30 percent of
total collection and handling costs for its recycling operations, while
constituting just 3 percent by weight of the material collected.

There are hundreds of plastic resins in use, but as a
practical matter only two, polyethylene terephthalate (PET), used in
large soda bottles, and high-density polyethylene (HDPE), used in milk
jugs, are recycled in quantity. Still, plastics producers have been
imprinting the recycling symbol on resins that are not being recycled to
any practical extent, raising some hackles.

Resa Dimino, a solid waste specialist at
Environmental Action in Takoma Park, Md., said customers in a pilot
plastic recycling program in San Diego last year were confused by the
symbol and put incompatible plastics in the same bins as the ones to be
recovered. "Recyclers had to reject the contaminated loads, which
frustrated a lot of consumers," she said.

ALTHOUGH Wellman has made money recycling PET bottles
collected in states with bottle bills, others -- even industry giants --
have found the going rougher. In 1990, Waste Management and Du Pont
announced, with great fanfare, a joint venture to recycle PET and HDPE
bottles. But Jane G. Witheridge, a vice president of Waste Management,
said the company discovered to its horror that it was costing as much as
$1,500 a ton to collect and process plastics with a market value of $80
to $100 a ton. Waste Management dropped out of the venture in 1991 and
Du Pont, last June.

"We could not see our way clear to a reasonable
financial return," said Frank Aronhalt, director of environmental
affairs for Du Pont. He said Du Pont does not produce HDPE, and the PET
it makes is different from plastic used in soda bottles, so it had no
internal markets and prices in external markets were weak.

Mr. Aronhalt said the company was continuing to
investigate chemical, rather than mechanical, methods of recycling
plastic.

The plastics industry has good reason to fear state
and local legislation on the disposal of packaging. According to the
American Plastic Council, 165 state-level bills banning or taxing the
use of plastic were introduced last year, although only a few
passed.

The industry is mounting an $18 million television
and print ad campaign with the tag line "take another look at plastic"
that draws attention to its ability to be recycled.

John Ruston, an analyst with the Environmental
Defense Fund in New York, said the money could be better spent. Prices
for materials like newspapers, metals and glass are beginning to revive
from their recessionary lows, he said, but high costs still act as a
drag on plastics.

"Instead of advertising," he said, "they should be
spending that money to do research on reducing collection costs."